Bitcoin, the world’s largest digital currency, is poised for a significant price surge, potentially reaching new all-time highs.
This bullish outlook comes as China introduces fresh economic stimulus measures and Russia accelerates its adoption of bitcoin in global trade. Experts believe these developments could drive bitcoin’s prices higher, with some predicting it could reach $100,000 or even more in the coming months.
The Chinese economic stimulus is one of the key factors driving this optimism. The People’s Bank of China (PBOC) has introduced a series of measures to revive its slowing economy, which include lowering borrowing costs and relaxing property rules.
Among the most significant actions is a 50 basis point cut in the Reserve Requirement Ratio (RRR), a move that frees up around $140 billion for new lending.
Chinese economic stimulus is seen as a potential driver for bitcoin, as increased liquidity often pushes investors toward riskier assets. Jamie Coutts, a chief analyst at Real Vision, highlighted how China’s moves could influence other central banks globally, stating:
“The bottom is in for global central bank liquidity for this cycle. Sit back and watch the other central banks fall into line. In a credit-based fiat fractional reserve system, debasement is a feature, not a bug.”
This influx of liquidity could boost demand for bitcoin, which is often viewed as a hedge against inflation and excessive government spending.
Historically, bitcoin has responded positively to central bank policies that increase market liquidity. Previous stimulus packages from China resulted in significant price hikes for bitcoin, and the current measures are expected to have a similar effect.
For instance, after the PBOC’s last major stimulus, bitcoin’s price saw a 100% rise. Coutts believes that this time around, bitcoin could break out to $78,000 or higher, citing strong technical indicators.
While the Chinese economic stimulus packages are creating buzz in the financial world, Russia is also believed to play a crucial role in bitcoin’s current momentum.
Russia has been increasingly turning to digital currencies to bypass Western sanctions, with plans to use bitcoin for trade with other countries, including China.
This move is part of a broader strategy by BRICS nations to reduce their dependence on the U.S. dollar in international trades.
Related: Putin Signs Landmark Law Legalizing Bitcoin Mining Across Russia
Recent reports suggest that Russia could soon start paying for Chinese goods using digital assets, a development that is likely to increase demand for bitcoin in both countries.
Anatoly Aksakov, a representative in the Russian State Duma, stated that both Russia and China possess significant expertise in digital assets and that developments in this technology are steadily advancing.
By moving toward bitcoin payments for global trade, Russia aims to lessen the impact of U.S. sanctions and strengthen its economic ties with China.
The country is set to finalize its regulatory framework for bitcoin transactions by November, and this shift could further drive bitcoin demand, pushing its price even higher.
Many other experts are also optimistic about bitcoin’s future price action.
Ian Lee, the Head of Operations at the derivatives exchange Flipster, pointed out that the recent interest rate reductions in both the U.S. and China are major factors fueling bitcoin’s current surge. He stated:
“One of the main reasons for the current rally is the 50 bps rate cut in the U.S., as well as the PBOC’s rate cut, the market is currently pricing in a roughly 50:50 chance of either a 50 bps or 25 bps rate cut at the November FOMC meeting.”
Markus Thielen from 10x Research highlighted that China’s recent $278 billion stimulus could significantly affect the bitcoin market, recalling past capital inflows into bitcoin that sparked major rallies, notably in 2013.
He mentioned, “The recently announced stimulus measures, timed just as the Fed begins cutting rates, could trigger significant capital outflows from China into the cryptocurrency market. The likelihood of a Q4 rally is exceptionally high, with gains likely front-loaded.”
Economist Lyn Alden posits that bitcoin’s price has historically been closely linked to global liquidity levels, implying that China’s stimulus measures could help bolster bitcoin valuations moving forward.
Analysts are now eyeing bitcoin’s potential to hit the $100,000 mark, driven by a combination of China’s liquidity injections and Russia’s growing use of bitcoin in international trade.
Julian Evans-Pritchard, a capital economics analyst noted: “This is the most significant PBOC stimulus package since the early days of the pandemic, However, it may not be sufficient on its own.”
The analysts believe that the combination of aggressive monetary policies from both U.S. and China could serve as a powerful tailwind for bitcoin’s price surge.
On the technical side, bitcoin’s price has been testing key resistance levels. Currently trading at $65,770, bitcoin faces immediate resistance at $65,862, with a stronger hurdle at $66,539.
A breakout above these levels could send bitcoin soaring toward new highs. However, if the price pulls back, bitcoin could find support at around $64,423 and $63,530, aligning with its 50-day exponential moving average (EMA).
According to Arthur Hayes, co-founder of BitMEX, quantitative easing from central banks worldwide will play a role in driving bitcoin’s next big rally.
He advises investors to accumulate bitcoin cautiously, avoiding leverage to manage potential risks during volatile market conditions.
The broader macroeconomic landscape is also contributing to bitcoin’s upward trajectory.
Positive economic data from the U.S., such as a steady GDP growth rate of 3% and lower-than-expected unemployment claims, has eased fears of an economic contraction.
Additionally, expectations of a 50 basis point rate cut by the U.S. Federal Reserve in November have fueled optimism among bitcoin investors.
As global central banks respond to economic challenges with aggressive monetary policies, bitcoin stands to benefit as a hedge against inflation and traditional fiat currency risks.
The combination of China’s stimulus, Russia’s adoption, and the potential for Federal Reserve rate cuts creates a perfect storm for bitcoin’s price to skyrocket.
